If adverse selection occurs for one or more benefits in a flexible benefits plan,those benefits may be dropped from the plan.

Question

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Adverse selection refers to the situation where individuals who are more likely to use a particular benefit opt for it, leading to higher costs for the employer. In such cases, the employer may choose to drop the benefit from the flexible benefits plan to mitigate the adverse selection risk.

If Adverse Selection Occurs for One or More Benefits in a Flexible